Are we /were we ever on left side of Laffer curve?

[robbase]

just wondering. Everyone (right leaning) folks aways say we are taxed too much, yadda yadda yadda, and at present time I might agree is not the best time to raise taxes, but according to the right is it ever time to raise taxes? I guess we are never on the left side of the Laffer Curve? Has the right ever advocated a tax increase?

Everyone (left & right) always seems to stick to their talking points / POV......

[stats45]

I think the Laffer curve is an odd way to justify tax rates and revenues at any level.

The curve assumes that the goal of the government is to maximize revenues to the government rather than to maximize economic growth. I would rather have a government that was not collecting the 'highest' amount of revenues with higher economic growth than have lower economic growth but the 'optimal' amount of revenues.

I consider myself a conservative, and I think if tax rates were increased by (let's say) 5% across the board, tax receipts by the federal government would increase. The long-term question is whether or not the loss in economic growth that accompanied the tax increases would be worth it to get the extra revenues. I certainly think that some government spending that would lower optimal economic growth (providing a basic safety net, paying for national defense) is worthwhile. I've just never seen the Laffer curve as a compelling argument for much of anything.

[SVT]

I'm an independent but have always leaned right, sometimes way right. I'm finding that I'm going more towards the middle, at least the last few years, not straight down the middle, just more towards the middle than I used to be lol

I used to totally agree with never raise taxes etc. but I have thought that it wouldn't be a bad idea to raise taxes on folks making more than $250k. Wow I never thought I'd say that! I'm opposed to increasing taxes for small businesses, though. That should be as low as possible.

Really, I think every single American should suck it up. Lets cut some Federal Government spending all around and raise taxes a little bit for every income group to help cut the nation's debt. Unfortunately, raising income taxes now with the economy could be bad, though, so it'd probably be a good idea to wait?

[BeenThere...DoneThat...]

...read my lips... ;D

[stats45]

I wouldn't mind seeing a revenue increase to the federal government by lowering tax rates and getting rid of most (or all) deductions. The Bowles-Simpson plan and a few other plans I've seen do this very well.

I would rather see no huge contraction in spending or changes to the tax code, however, until the recovery is on more solid footing.

[Miss Tequila]

Jun 27, 2011 22:04:12 GMT -5 SVT said:

I'm an independent but have always leaned right, sometimes way right. I'm finding that I'm going more towards the middle, at least the last few years, not straight down the middle, just more towards the middle than I used to be lol

I used to totally agree with never raise taxes etc. but I have thought that it wouldn't be a bad idea to raise taxes on folks making more than $250k. Wow I never thought I'd say that! I'm opposed to increasing taxes for small businesses, though. That should be as low as possible.

Really, I think every single American should suck it up. Lets cut some Federal Government spending all around and raise taxes a little bit for every income group to help cut the nation's debt. Unfortunately, raising income taxes now with the economy could be bad, though, so it'd probably be a good idea to wait?

You do realize that most small business owners are not taxed as C-corps so by raising the taxes on those making over $250K you just raised taxes on small businesses....

[Sum Dum Gai]

You do realize that most small business owners are not taxed as C-corps so by raising the taxes on those making over $250K you just raised taxes on small businesses....

They aren't smart enough to change their corporate structure in response to changing tax code? That doesn't bode well for the long term viability of their business.

[Deleted]

Most small businesses make no where near 250K.

[Gardening Grandma]

I wouldn't mind seeing a revenue increase to the federal government by lowering tax rates and getting rid of most (or all) deductions.

This doesn't make sense to me. It's like saying, "I'd like our household income to increase by taking a pay cut."

[Tiny]

It's like saying, "I'd like our household income to increase by taking a pay cut."
But in some people's mind (the math challenged?) their household income would increase if they earned less - because they would be paying less tax!

Kinda like a math challenged friend who can't understand why anyone would pay 5K out of pocket for classes/courses that would get them (or her!) to the next pay scale level which is an increase of 3K. She can't fathom why anyone would spend 5K to get a 3K pay increase... Guess she's doesn't see the value in having 3K more each year going forward OR in getting yearly raises on that higher salary...

[phil5185]

en.wikipedia.org/wiki/File:Laffer-Curve.svg

You are mixing "raise taxes" and "raise tax rates", there is a difference. The Laffer Curve defines the optimal point of tax revenue. If the economy is operating to the right of optimal, you would lower rates to increase tax revenues (Kennedy, Reagan, Bush did this). And if the economy is operating to the left of optimal, you would raise tax rates to increase tax revenues.

Or, if the economy were operating at a surplus (Clinton) you would lower tax revenue by backing down the left side of the curve to lower both tax rates & tax revenue.

The concept worked well - the Media had trouble with the math, invented the term 'trickle down', and effectively squelched the use of the concept.

I wouldn't mind seeing a revenue increase to the federal government by lowering tax rates and getting rid of most (or all) deductions.
This doesn't make sense to me. It's like saying, "I'd like our household income to increase by taking a pay cut."

Hmm - it makes perfect sense to me, that is what I would like to see happen. Strip out the deductions and credits (let the free market pick the winners & losers, not the Tax Code). Lower the new tax rates to 'revenue neutral', then adjust upward a bit to add revenue (in a fair manner, not on the backs of a single group).

[jkapp]

Jun 27, 2011 22:04:12 GMT -5 SVT said:

I'm an independent but have always leaned right, sometimes way right. I'm finding that I'm going more towards the middle, at least the last few years, not straight down the middle, just more towards the middle than I used to be lol

I used to totally agree with never raise taxes etc. but I have thought that it wouldn't be a bad idea to raise taxes on folks making more than $250k. Wow I never thought I'd say that! I'm opposed to increasing taxes for small businesses, though. That should be as low as possible.

Really, I think every single American should suck it up. Lets cut some Federal Government spending all around and raise taxes a little bit for every income group to help cut the nation's debt. Unfortunately, raising income taxes now with the economy could be bad, though, so it'd probably be a good idea to wait?

With the current politicians, I believe it is never a good idea to increase taxes...and then it would be even more ignorant to believe if taxes were raised that our debt would decrease!

For the past several decades, whenever a tax is increases, it is never enough to satiate the spending habits of our politicans. They spend like mad during the "high" times and then keep spending during the "low" times. Any additional tax revenue received right now, with the spend happy people still in charge, would just get spent before it was even collected.

It's like giving a fat kid more cake and then expecting him to lose weight. It's ain't gonna happen

Until spending gets under control, no amount of additional taxation will help.

[Deleted]

Jun 27, 2011 23:54:30 GMT -5 Sum Dum Gai said:

You do realize that most small business owners are not taxed as C-corps so by raising the taxes on those making over $250K you just raised taxes on small businesses....

They aren't smart enough to change their corporate structure in response to changing tax code? That doesn't bode well for the long term viability of their business.

Change to what? A C-Corp would be an even worse option for most small businesses. You either get double-taxed or you just distribute all the profits out through Payroll where you pay FICA and income taxes. Either way it's hitting small businesses.

Personally, I would prefer to see a consumption tax. Eliminate all income taxes, capital gains taxes, corporate taxes and just tax purchases.

I used to be a small business lender and own a small business now. It wasn't at all uncommon to see a husband/wife have a business for 20 years making a modest income. Maybe a few good years thrown in, where they take a combined $150K salary and the business profits $200K. But it's not like they are actually taking home the $200K. It's tied up in inventory or A/R. So when they pay taxes on that $200K, it's coming right out of the business.

[SVT]

Jun 28, 2011 14:03:36 GMT -5 jkapp said:

Jun 27, 2011 22:04:12 GMT -5 SVT said:

I'm an independent but have always leaned right, sometimes way right. I'm finding that I'm going more towards the middle, at least the last few years, not straight down the middle, just more towards the middle than I used to be lol

I used to totally agree with never raise taxes etc. but I have thought that it wouldn't be a bad idea to raise taxes on folks making more than $250k. Wow I never thought I'd say that! I'm opposed to increasing taxes for small businesses, though. That should be as low as possible.

Really, I think every single American should suck it up. Lets cut some Federal Government spending all around and raise taxes a little bit for every income group to help cut the nation's debt. Unfortunately, raising income taxes now with the economy could be bad, though, so it'd probably be a good idea to wait?

With the current politicians, I believe it is never a good idea to increase taxes...and then it would be even more ignorant to believe if taxes were raised that our debt would decrease!

For the past several decades, whenever a tax is increases, it is never enough to satiate the spending habits of our politicans. They spend like mad during the "high" times and then keep spending during the "low" times. Any additional tax revenue received right now, with the spend happy people still in charge, would just get spent before it was even collected.

It's like giving a fat kid more cake and then expecting him to lose weight. It's ain't gonna happen

Until spending gets under control, no amount of additional taxation will help.

That's why I mentioned spending cuts.

[seriousthistime]

Here's a place to cut spending:

www.taxpayer.net/resources.php?category=&type=Project&proj_id=4636&action=Headlines%20About%20TCS#

Comparatively, $6.1 million is a mere pittance, but if we're going to start somewhere, this seems like a good place.